Insider Tips on Selling Technology to Banks: Action 2
Establish Credibility
Continuing our series designed to help technology companies sell to financial services companies, we look at the critical importance of building credibility, especially for smaller providers.
Banks are more amenable to talking to small technology providers today than ever in the past. But there is still a huge credibility barrier to overcome.
A few years ago, I led a search for provider of cross-border lockbox services for a large bank. During the search, I found the range of banking knowledge brought to the table was almost shocking. I had to educate one provider on his own country's regulatory environment. There was little chance he could advise us on cross-border implications. But one provider brought an ex-banker who had deep operational and regulatory knowledge. Guess which we were more inclined to work with!
My colleague David Milligan has worked with hundreds of fintech firms around the world, connecting the best ones to banking clients. He shared that while it has become commonplace for tech firms to show some logos of past clients in sales materials, what was most compelling to banks were stories from other clients. These could be in the form of case-studies or testimonials, but most important was linking these to the client’s own needs during sales conversations.
From our experience with many, many banks over the years, any bank that will want to ensure that:
You know enough about their domain within banking to be able to partner with them effectively. They should not need to educate you.
You have a solid enough business plan that they can count on your solution being around for the long term.
You understand third party risk from their perspective as it relates to your domain. This will be especially significant if you are handling customer transactions or data on the bank’s behalf. (Note that Federal and State regulators have in the past few years really stepped up their expectations of banks in managing risks associated with third- and even fourth-party technology and service providers).
You can help them with integration challenges (technology, operations, risk, etc).
By working through how you will answer the above points, in a compelling way, before meeting any prospective bank client, you will significantly improve the odds of closing a deal.
Next time we will discuss the need to show that you’re serious about being a true partner to your prospective financial services customer.